Prosus buys Stack Overflow for global education technology growth

Stack Overflow, a New York City based online question and answer platform for code developers, announced this week that it is being bought by Prosus for $1.8 billion.

“Learning of any kind typically begins with a question and (Stack’s) platform is critically important for global developers when they have questions about their work,” said Larry Illig, chief executive (CEO) of Educational Technology at Prosus. “With enduring skills shortages and ever-evolving needs within technology organizations, technology training has emerged as the largest and fastest growing segment of corporate learning and development.”  

Stack Overflow has about 500 employees; Prashanth Chandrasekar is its CEO. It offers a free public question and answer platform for developers. This generates revenues from advertisements for technology products as well as for hiring staff.

Stack’s paid software as a private service collaboration platform has more than 1,500 customers including Microsoft, Bloomberg, Chevron and Instacart. They also use Stack to centralize documentation and improve efficiency in their coding work.

Over the past 15 months, during the COVID-19 lockdown, Stack has seen a surge in demand for both its public and private platforms.

Stack serves more than 100 million people every month, most of them in the U.S. Over 85% of its community visit the platform every week to access more than 52 million questions and answers. It’s public and private platforms have helped developers over 50 billion times, the company says.

Prosus owns corporate learning companies Udemy and Codecademy and has a major stake in another, Skillsoft. Following its purchase of Stack, Prosus will be able to provide training tools to 90% of the Fortune 100 companies, across the globe.

Prosus is a global consumer internet group and one of the largest technology investors. Listed on the Euronext Amsterdam stock exchange, it has a market value of $167 billion. It is a subsidiary of Naspers, a South African firm listed on the Johannesburg Stock Exchange.

In 2001, Naspers invested $37 million for a one-third stake in Chinese software start up Tencent, which is currently valued at over $250 billion. Since 2001, largely due to its Tencent stake, Naspers has delivered $1,200 for every dollar invested in its stock. 

Stack Overflow was founded in 2008 by Joel Spolsky and Jeff Atwood, two developers who wanted to make coding resources more accessible for all. Spolsky, who was CEO of Stack Overflow from 2010 to 2019, served as a paratrooper in the Israeli army. He graduated from Yale University in 1991 and worked on the Excel team at Microsoft.  

In 2019, while Spolsky became Chairman, Prashanth Chandrasekar was brought in as the chief executive. Previously, Chandrasekar served as Senior Vice President of Rackspace’s Cloud & Infrastructure Services portfolio of businesses, including the Managed Public Clouds, Private Clouds, Colocation and Managed Security businesses.

Before that, Chandrasekar held a range of senior leadership roles at Rackspace including as General Manager of its global business focused on the world’s leading Public Clouds including Amazon Web Services, Microsoft Azure, Google Cloud Platform and Alibaba Cloud.

Prior to Rackspace, Chandrasekar was a Vice President at Barclays Investment Bank, providing strategic and mergers and acquisitions advice for clients in the technology, media and telecom industries. He was also a manager at Capgemini Consulting.

Chandrasekar holds an MBA from Harvard Business School, an M.Eng in Engineering Management from Cornell University and a B.S. in Computer Engineering (summa cum laude) from the University of Maine.

Stack Overflow has raised $153 million in funding. In July 2020, it raised $85 million including from existing investors Andreessen Horowitz and Union Square Ventures. Bezos Expeditions, founded by Jeff Bezos of Amazon, is also an investor.

While Stack’s valuation in the 2020 funding round was not disclosed, the earlier round in 2015 reportedly valued it at $459 million. 

Prosus’ purchase of Stack is expected to close next quarter. Prashanth Chandrasekar, notes in a Stack blog post, “We will have more resources and support…and we can accelerate our…rapid and robust international expansion.”

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